A fundamental process in all organisms is the ability to alter gene expression in response to environmental signals. In prokaryotes, many of these responses are mediated by a large family of homologous proteins, known as the "two-component" regulatory systems, which share a common mechanism of action involving transient protein phosphorylation. These systems control such diverse cellular processes as virulence in Bordetella pertussis, Salmonella typhimurium, and Agrobacterium tumefaciens; nitrogen fixation in Rhizobium species; and sporulation in Bacillus subtilis. Our experimental focus is the two-component system that controls the transcription of two outer membrane proteins of Escherichia coli K-12. A key regulatory step in this pathway involves the phosphorylated transcriptional effector, OmpR. The primary goal of this proposal is to establish the specificity of the molecular interactions between OmpR, its target DNA, and the transcriptional machinery and, in particular, to establish how phosphorylation of OmpR controls transcription initiation. I will use a combined genetic and biochemical approach to address the following questions: (1) How does phosphorylation of OmpR affect its ability to bind DNA? (2) Why does the binding of OmpR to some sites result in transcriptional activation, while binding at other sites result in repression? (3) Is direct contact between OmpR and RNA polymerase required for transcriptional activation? This work will contribute to our understanding of two-component regulatory systems, which have clear relevance to human health and welfare. In addition, the mechanism of transcriptional activation in prokaryotic systems and the basic process of signal transduction likely share common mechanistic features with parallel processes in higher organisms.